Watch Professor Steve Keen, a renowned economist and outspoken critic of conventional economic thinking, present “The Appallingly Bad (Neoclassical) Economics of Climate Change” in this insightful talk recorded at the Foundling Museum, London, on Monday, June 23, 2025, during London Climate Action Week 2025. A Distinguished Research Fellow at UCL and one of the few economists to predict the 2008 Global Financial Crisis, Steve draws from over 80 publications to expose the economic myths fueling climate inaction. In this compelling session, he challenges the flawed models driving delay and calls for a radical rethinking of how economics addresses the planetary emergency.

This session features economist Steve Keen delivering a powerful and often scathing critique of the way mainstream economics approaches climate change. Drawing on decades of research and his deep familiarity with both economic modeling and climate science, Keen contrasts the cautious, data-driven warnings from scientists with the overly-optimistic—and, in his view, deeply flawed—projections from leading economists like William Nordhaus.

Steve explains how widely-cited economic models grossly underestimate the potential damage of global warming, sometimes treating scenarios of 5–7°C of warming—levels scientists deem catastrophic or even existential—as little more than minor slowdowns in economic growth. Through vivid examples and biting humor, Keen exposes the faulty assumptions, selective reading of climate science, and methodological shortcuts that underpin these models.

A significant portion of the talk is dedicated to unpacking the history and significance of The Limits to Growth study, and how its warnings about exponential growth and resource depletion were dismissed by the economics establishment. Keen recounts how Nordhaus and others replaced carefully calibrated system dynamics models with simplistic growth equations based on hunches, omitting critical inputs from nature and ignoring the structural changes climate disruption would unleash. He also dissects the now-common assumption in economic modeling that spatial climate variations today can be projected forward in time—a methodological error that, he argues, erases the reality of unprecedented and irreversible climate shifts. Throughout, Keen drives home how these errors lead policymakers and the public to dangerously underestimate the urgency of the crisis.

In his closing, Keen turns to the real risks we face—from AMOC collapse to rapid ice sheet loss—and the necessity of geoengineering and systemic economic measures to prevent societal breakdown. He warns of scenarios like European glaciation, deadly wet-bulb heat events, and food insecurity in import-dependent nations, advocating for rationing, income redistribution, and cooperative global action. Seeing mainstream economics as a barrier, not a guide, he embraces initiatives like the MEER proposal as pragmatic steps toward planetary survival. The result is an urgent, uncompromising call to replace dangerous economic complacency with realistic, science-based climate policy before it’s too late.

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